CFTC Commissioner Chilton's Views on High-Frequency Traders
Commentary by Bob Zwirb
Attached is an Energy Metro Desk article describing the views of CFTC Commissioner Bart Chilton with respect to the market influence of high-speed traders and the need to change (make tougher) the CEA's standard on manipulation.
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The attached is an excerpt from the most recent issue of Energy Metro Desk, which is published bi-weekly by Scudder Publishing Group, an energy trade news publishing company based in the Washington, D.C. metropolitan area. Those interested in learning more about the Energy Metro Desk may do so by linking to www.energymetro.com or emailing [email protected].
Reprinted with permission of the publisher, Scudder Publishing Group, LLC. Copyright 2013.
Commentary
In this interview with Energy Metro Desk, Commissioner Chilton comments on two issues of importance to the CFTC's enforcement mission:
First, for the purpose of proving an illegal wash sale, Chilton states that it might not be necessary to prove that the respondent "had the intent to wash." This view, if adopted, would alter the current standard, which holds that "[t]he essential and identifying characteristic of a 'wash sale' . . . [is] the intent not to make genuine, bona fide trading transactions in stocks or commodities." CFTC v. Savage, 611 F.2d 270, 284 (9th Cir. 1979) (quoting In re Jean Goldwurm, 7 Agric. Dec. 265, 274 (1948)).
Second, notwithstanding a new CFTC rule that that captures reckless rather than intentional anti-manipulative conduct (CFTC Rule 180.1), Commissioner Chilton in this interview states that he thinks the current "bar [for proving manipulation] is way too high."